Southern Theater founders over funding

The historic Southern Theater in Minneapolis, a hotbed of performing arts for more than 30 years, is in the throes of a severe financial and management crisis.

Just in the past week or so, the West Bank theater has been buffeted by the pullout of its major funder, which it owes more than $300,000; the resignation of nearly a third of its board after emergency weekend meetings; and the denial of a pivotal bridge loan.

The cascade of problems clouds the very future of the 210-seat Southern, which has been a go-to spot for new music, modern dance and inventive theater. Asked Thursday whether the organization that runs the 101-year-old facility will exist six months or a year from now, Anne F. Baker, who became board chair over the tumultuous weekend, said: "We can't project out that far. We're taking it day by day, step by step."

Even the hint of a shutdown had an immediate ripple effect. "The Southern is a tremendously vital and important asset to the Twin Cities arts community," said Philip Bither, performing-arts curator at Walker Art Center.

The news coincided with the launch on Thursday of String Theory, a four-day music festival organized by the Southern along with other Twin Cities presenters, including the Walker.

Turning around

The Southern, with an annual budget of about $1 million, seemed to be on an upswing after the tumult caused when longtime artistic director Jeff Bartlett was dismissed by the board in 2008. The theater hired arts and education executive Patricia Speelman as an interim executive director, restructured its artistic team, and expanded its board.

In January 2010 it brought in Gary Peterson, well-regarded for his work with James Sewell Ballet, as executive director.

"In so many ways, our struggle has been about finding a model where all the pieces work," Peterson said Thursday. "It's been very difficult to get traction, especially in this economic environment when arts organizations are all hurting, but we're doing the best that we can. Have all our choices been the best ones? Hindsight is very enlightening."

Things came to a head for the Southern in the last 10 days. Last week, it learned it was turned down for a $90,000 bridge loan. Then last weekend, the board held two emergency meetings, electing a new slate of officers. Ousted as chair was Susan Lach, who was in Florida at the time. Lach and five others resigned from the board in protest.

"I feel betrayed by this coup, for that's what it is," said Lach, an attorney.

The new leaders met this week with the McKnight Foundation, which has been a pillar of support for the theater. For example, the foundation granted the Southern $860,000 in 2008 to run a fellowship program that included money for dancers and choreographers. The grant also included administrative support. In this setup, the Southern acts as a pass-through organization responsible for paying individual artists.

The new board leaders told stunned officials at the McKnight that the winners of 2010 fellowships through the Southern -- $25,000 apiece, disbursed over two years -- still had not received all of their money.

The McKnight asked the Southern to return more than $300,000 in previously granted money.

"The most frustrating thing about this whole thing is being strung along," said dance fellowship winner Eddie Oroyan. "One week we're told that it's coming next week. After that, it's coming in two weeks. I've got tons of debt waiting for this money. I try not to be mad, because it's a gift, a reward for my talent, but I have bills waiting to be paid."

"We will make the artists' payment whole," said Vickie Benson, arts program director at McKnight. She said that the fellowship program will no longer be housed at the Southern and that McKnight would not be funding the theater in the foreseeable future.

"It'll be a relief to have it," said Penelope Freeh, a fellowship winner who has been with Sewell Ballet for 17 years. "I want to start a family. I'm contemplating foot surgery. This award, and the money that comes with it, shows the value of my work."

The Southern was unable to pay Freeh and five other 2010 fellowship winners because someone at the theater commingled the artist-dedicated funds with regular operating expenses. Who did it? None of those interviewed had an answer.

"It predates Gary's tenure," said Baker, who added that the board is seeking to hire an accountant to present a full picture of the theater's finances. "There's a lot we do not know."

Historic venue

The Southern is housed in a building that opened in 1910. Over the decades, it has hosted vaudeville shows and movies. In 1975, it became Guthrie 2, the second space for the Guthrie Theater. Its role has been in flux in recent years as it diversifies its programming and as the Cowles Center for Dance gets ready to come online this fall. Many of the dance troupes that have used the Southern are migrating to the Cowles.

"Our hope is that the Southern thrives for our community," said Benson. "The house is one of the most beloved for dance companies. It is up to the new leadership of the Southern to make that happen."